South Korea yesterday announced plans to spend an extra 4.9 trillion won (US$3.5 billion) this year to create 550,000 new jobs as it teeters on the edge of a recession brought on by the global slump.
The decision was reached at a special presidential council meeting on the economic crisis, the presidential office said. The money will come from a supplementary budget to be unveiled next week.
Media reports and officials say the government is likely to ask parliament to approve an extra budget of around 30 trillion won.
The country’s export-driven economy is on the brink of its first recession since 1998. The official unemployment rate rose to 3.9 percent last month, the highest in almost four years.
The number of people employed fell by 142,000 year-on-year, the largest reduction since September 2003.
South Korean President Lee Myung-bak called for all-out efforts to save or create jobs.
“The government’s goal this year is to create jobs because many people talk about social welfare, but the best welfare the government can provide is a job,” he told the meeting.
“The largest goal of the supplementary budget is first to create jobs and second to create jobs,” Yonhap news agency quoted him as saying.
These must first go to people who are the sole breadwinners in a family, he said, stressing that work gives people confidence and builds the base for economic recovery.
The country’s biggest business and union groups have already announced what Lee has called “historic, unprecedented measures” to save jobs — including wage cuts and job-sharing.
The spending announced yesterday amounts to roughly 2.9 trillion won for direct job creation, 500 billion won for encouraging job-sharing measures, 158 billion won for training and about 1.6 trillion won for measures to promote new employment and support the poor.
South Korean Finance Minister Yoon Jeung-hyun has said the economy will likely contract 2 percent this year and lose 200,000 jobs.
Daniel Melser, a senior economist with Moody’s Economy.com, called this figure optimistic and said the export-driven economy is likely to shed at least half a million jobs over the course of this year.
He said yesterday’s program was unlikely to reach its job creation target.
“Nevertheless, if the money is appropriately directed it will help to make somewhat of a dent in Korea’s lengthening unemployment queues — though a smaller dent than the half-million jobs which is hoped for,” Melser wrote in a commentary.
The collapse in foreign demand for South Korea’s exports had hit manufacturing very hard, with the finance and construction sectors also feeling the brunt of the crisis, he said.
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
EARLY TALKS: Measures under consideration include convincing allies to match US curbs, further restricting exports of AI chips or GPUs, and blocking Chinese investments US President Donald Trump’s administration is sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry, an early indication the new US president plans to expand efforts that began under former US president Joe Biden to limit Beijing’s technological prowess. Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron Ltd and ASML Holding NV engineers from maintaining semiconductor gear in China, people familiar with the matter said. The aim, which was also a priority for Biden, is to see key allies match China curbs the US
NOT TO WORRY: Some people are concerned funds might continue moving out of the country, but the central bank said financial account outflows are not unusual in Taiwan Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International
The popular Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) arbitrage trade might soon see a change in dynamics that could affect the trading of the US listing versus the local one. And for anyone who wants to monetize the elevated premium, Goldman Sachs Group Inc highlights potential trades. A note from the bank’s sales desk published on Friday said that demand for TSMC’s Taipei-traded stock could rise as Taiwan’s regulator is considering an amendment to local exchange-traded funds’ (ETFs) ownership. The changes, which could come in the first half of this year, could push up the current 30 percent single-stock weight limit
RSS